How E-Commerce Becomes Smarter with Artificial Intelligence

Artificial Intelligence (AI) augments almost every industry out there, but eCommerce is where it really shines and displays its full potential. AI turns online retail into a data-driven service where both the customers and businesses can enjoy the privilege of real-time insights and accurate decision-making.

Thanks to this new technology, sales agents and customer service managers can take the guesswork out of their strategies and make use of proven business techniques only. We all witnessed the progress since digital retail amounted to $3.53 trillion globally in 2019 while being projected to grow to $6.54 trillion in the next two years.

But how does eCommerce become smarter with AI?

It’s not just one thing, but rather a whole series of major improvements that make online retail one of the fastest-growing businesses of our era. In this post, we will present you with the most important stats and facts about eCommerce seo services and show you 10 ways AI makes it better.

The Basics of AI in Online Business

What is AI? Encyclopedia Britannica defines it as the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.

“It is the ability of AI systems to process information millions of times faster than the human brain. This basically means that AI helps eCommerce businesses to make strategic decisions much quicker and more accurately”, Jake Gardner, an author, explains the feature that separates intelligent machines from human beings.

It may sound vague or irrelevant, but it has a number of practical consequences. Here’s what industry reports say about the impact of AI on eCommerce:

  • AI increases sales numbers by 50% based on the number of leads.
  • When AI is present, 49% of consumers are willing to shop more frequently while 34% will spend more money. 
  • Nearly 50% of executives believe that the most important benefit of AI is providing data that can be used to make decisions.
  • Amazon reduced its “click to ship” time to 15 minutes - a 225% decrease - with an AI-powered logistics platform. 
  • More than 60% of business executives with an innovation strategy say they are using AI to identify opportunities in data that would otherwise be missed.

10 Ways AI Improves Online Retail

Now that we’ve covered the basics of AI, we can concentrate on its influence on eCommerce. We selected the top 10 ways AI has been improving online retail. Let’s take a look!

1. Personalized product recommendations

If you frequently visit Amazon or any other eShop, you can certainly notice a bunch of product recommendations. Thanks to AI, these suggestions are highly personalized and tailored according to your browsing habits and shopping preferences. 

This is an easy way for online businesses to boost sales results and reduce customer churn. The media streaming service Netflix is the most notable example here as it saves over $1 billion annually due to the AI-powered personalization and recommendation engine.

2. Customer service chatbots

Chatbots have quickly become one of the key features of online business because they guarantee fast and efficient customer service. From assignment writing service agencies to online stores, it looks like everyone is eager to utilize chatbot programs these days.

Why is that so? 

The reason is simple – AI chatbots are always available and able to replace hundreds of customer service agents simultaneously. They can answer the majority of users’ questions, but they also improve over time due to their self-learning capabilities.  

3. Targeted advertising

eCommerce businesses use digital advertising to approach verified leads and increase conversion rates in no time at all. Of course, such a high level of productivity would be impossible without AI and its targeting potential. Modern advertising platforms give you the power to target audiences based on a number of traits:

- Demographic features like gender, location, and age
- Personal interests and purchasing preferences
- Income level and professional titles
- Marital or relationship status
- Hobbies and leisure time activities

4. Product testing

The issue of product testing is fundamental in eCommerce because buyers still enjoy trying out something before actually purchasing it. This is where AI acts as a game-changer as it enables virtual product testing. 

A famous example comes from IKEA Place, a mobile app designed for simpler and more convenient purchasing experiences. A customer can select any piece of furniture from the catalog and instantly check how it would look like in his/her home. 

It is only one example of virtual product testing, but it clearly explains the potential of AI in this field. 

5. Voice assistance

Voice shopping is another trend that threatens to win over online retail. With voice assistants like Siri or Alexa, eCommerce is getting easier and more convenient than ever before. Why users love voice assistance? 

First of all, this AI-powered technology ensures the quickest access to online stores and enables comfortable shopping experiences. Secondly, it allows for hands-free browsing, product exploration, and purchasing.

Given the fact that modern consumers demand super-speedy services, it is clear why voice assistants play such a major role in online shopping these days.

6. Visual search

A lot of customers don’t really know what they are looking for unless they see an image of the actual product. This is where AI-driven image search comes in quite handy as you can simply take a photo of an interesting product and use visual search to find it online. Every major eCommerce platform already adopted the new search method, which helps users find the desired items even if they don’t know the exact name of the product. 

7. Better inventory management 

Another function of eCommerce that takes advantage of AI systems is inventory management. Online stores handling thousands of products and SKUs require the highest level of accuracy, which is not something human agents can do successfully around the clock.  

On the other hand, AI inventory management programs automatically manage and monitor products and make the whole process simple and effortless. It doesn’t only save companies’ manpower but also reduces error rates and improves the overall functioning of an eCommerce logistics.

8. Retargeting

Abandoned cards represent a big issue in online retail because lots of potential purchasers give up before completing the payment. AI deals with this problem through retargeting, a function that helps eCommerce businesses to reach out to their leads once again. 

For example, it allows you to send an email to remind potential buyers about products left in their shopping baskets. The tactic does not guarantee results 100% of the time, but even a 5% or 10% increase is enough to boost the success of your eCommerce business.

9. Analyze users’ comments and tackle fake reviews

Every online retailer must take care of its professional reputation. The only way to do it is by monitoring and replying to customers’ online reviews. 

First of all, users expect you to engage with their comments and send a timely reply, particularly if they give you negative feedback. Secondly, AI pays special attention to clearly fake reviews and warns you about the comments that can harm your digital authority.

10. Data analytics

AI is the driving force behind data analytics, a function that successful eCommerce companies use to improve their services and increase customer satisfaction rates. An AI-powered system can analyze gigantic data libraries and make relevant conclusions almost instantly, so you can act accordingly and prepare for the coming trends or make credible business predictions. 

The Bottom Line

AI thinks like a human being, but with much better processing power. This enables the new technology to revolutionize eCommerce and helps online stores to make cleverer business decisions. The result is obvious – eCommerce is skyrocketing and becoming one of the most influential business trends of the 21st century. 

In this post, we analyzed 10 ways online retail becomes smarter with AI. Do you think that’s all eCommerce stores can get from intelligent machines? Share your thoughts in the comments!

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  1. BP SINGH10 July

    Very unique article and different from what other bloggers are posting these days...every blogger these days is busy writing about how to make money with blogging...your article stands apart from the crowd..

    1. Thank you so much for your valuable comment! This keeps us inspiring to write more great content like this for our readers.
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